Thales won a bidding war against Atos to take over the French chipmaker.
Acquisitions continue to occur in the cybersecurity industry, this time with aerospace and defense group Thales purchasing Gemalto, a chipmaker, for $5.6 billion dollars. This comes on the heels of two cybersecurity titans, Symantec and Comodo, selling the majority shares of their CAs.
Thales bid trumped another French firm, Atos, who was also attempting to take over Gemalto.
Gemalto was attempting to switch from phone SIM cards to security services like encryption and biometric passports, but had suffered through a difficult year in which profit warnings diminished its share prices.
Thales came in and offered 51 euros per share, Atos offered 46, Thales came away the winner. Atos has said it will not pursue its bid, but will be available should the deal with Thales fall through.
“This is a terrific project,” Thales CEO Patrice Caine told Reuters on Sunday. “In digital, Gemalto and Thales are like twins.”
The agreement will merge Thales’ digital activities with Gemalto to create a top-three global player in the security industry.
The deal is expected to close in the latter half of 2018. Thales does not expect job losses from the takeover, it’s pledged to maintain current jobs levels until at least the end of 2019. That doesn’t refer to Gemalto’s struggling SIM chip business. A union leader at Gemalto has said he plans to call on the chipmaker to drop a plan that would cut 288 jobs.
Part of what helped facilitate this deal is that both Gemalto and Thales are largely backed by French government entities. Thales’ main stakeholder is the French government itself while Gemalto’s primary backing comes from Bpifrance, a state-owned bank.